Pandemic transforms gift exchange
For many Americans, the casual holiday exchange is over: No more White Elephant gifts for extended family or Secret Santa at work.
Heather Schmidt has trimmed dozens of names off her gift list — neighbors, colleagues, her kids’ teachers and coaches — buying only for a handful of family members. And she has no regrets. This Christmas is about starting over.
“I’m done buying stuff for the sake of buying it,” the 39-year-old said. “I don’t mean to sound ungrateful, but I am tired of coming home with bags of trinket-y stuff that lasts for a few days before it becomes plastic trash.”
U.S. consumers are rethinking their approach to gift-giving, scaling back on what they buy and for whom, with a focus on the practical: small kitchen appliances like air fryers, books and, increasingly, gift cards. The pandemic, which last year put an abrupt halt to communal gift exchanges of all kinds and has compelled many families to reconsider long-held traditions. Rising prices and supply chain disruptions that have led to sparse store shelves have only accelerated the shift.
More shoppers are buying secondhand goods, or simply giving cash or gift cards this year. Others are doing away with the fuss and waste of wrapping paper, opting instead for reusable gift bags or, in some cases, piling unadorned Amazon boxes under the tree. (Amazon founder Jeff Bezos owns The Washington Post.)
“A lot of obligations - the office Christmas party and big family gift exchanges - have disappeared,” said Milton Pedraza, chief executive of the Luxury Institute, a consulting and research firm. “Instead we’re thinking practically by focusing on needs and trading up to higher-quality products.”
That sensibility has fueled a fundamental change this holiday season. Research shows that gift-givers typically favor novelty items over useful ones, says Julian Givi, a marketing professor at West Virginia University who studies consumer behavior and gift giving. But the COVID crisis has changed peoples’ priorities both for themselves and those close to them.
“Consumers love giving fun, flashy, unique gifts, but the pandemic seems to have turned that innate desire on its head,” he said. “People are saying, ‘I really to want to buy my sister a margarita machine or a chocolate fondue set. But I should get her a gift card for gas instead.’”
Retailers adapted by prioritizing more practical, bigger-ticket items than impulse buys. At J. Crew, the season’s biggest sellers include pricier goods like cashmere sweaters and classic jackets, according to chief merchandising officer
Lisa Greenwald. And with most customers still working from home in some capacity, “colleague gifting” has yet to make a meaningful comeback.
The auction site ebay says it’s selling five used watches and three used handbags every minute. “Consumers are actually shopping differently and taking a more openminded approach,” Senior Vice President Jordan Sweetnam wrote in October.
At Omaha Steaks, the share of gift sales rose 13 percent early in the pandemic and have continued to climb as families opt for filet mignons, scalloped potatoes and apple tarts in lieu of traditional presents, according to Brian Fowler, the company’s vice president of procurement and product development.
“People are simplifying the holidays,” he said, noting that the company has added larger gift packages to keep up with demand.
Pandemic-related product shortages and shipping delays have also made it increasingly difficult and expensive to track down popular gifts. Overall prices have risen nearly 7 percent in the last year, according to the Commerce Department’s latest data, and retailers of all kinds have begun raising prices and dialing back discounts in response.
Meanwhile, sales of gift cards — the ultimate practical present — are up 43 percent from last year, according to fintech company Block.